Coca Cola Price To Book vs. Return On Equity

C0Q Stock  EUR 33.90  0.30  0.88%   
Based on the key profitability measurements obtained from Coca Cola's financial statements, Coca Cola HBC may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Coca Cola's ability to earn profits and add value for shareholders.
For Coca Cola profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Coca Cola to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Coca Cola HBC utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Coca Cola's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Coca Cola HBC over time as well as its relative position and ranking within its peers.
  
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Please note, there is a significant difference between Coca Cola's value and its price as these two are different measures arrived at by different means. Investors typically determine if Coca Cola is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Coca Cola's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Coca Cola HBC Return On Equity vs. Price To Book Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Coca Cola's current stock value. Our valuation model uses many indicators to compare Coca Cola value to that of its competitors to determine the firm's financial worth.
Coca Cola HBC is number one stock in price to book category among its peers. It also is number one stock in return on equity category among its peers reporting about  0.05  of Return On Equity per Price To Book. The ratio of Price To Book to Return On Equity for Coca Cola HBC is roughly  21.19 . The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Coca Cola's earnings, one of the primary drivers of an investment's value.

Coca Return On Equity vs. Price To Book

Price to Book (P/B) ratio is used to relate a company book value to its current market price. A high P/B ratio indicates that investors expect executives to generate more returns on their investments from a given set of assets. Book value is the accounting value of assets minus liabilities.

Coca Cola

P/B

 = 

MV Per Share

BV Per Share

 = 
2.71 X
Price to Book ratio is mostly used in financial services industries where assets and liabilities are typically represented by dollars. Although low Price to Book ratio generally implies that the firm is undervalued, it is often a good indicator that the company may be in financial or managerial distress and should be investigated more carefully.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Coca Cola

Return On Equity

 = 

Net Income

Total Equity

 = 
0.13
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.

Coca Return On Equity Comparison

Coca Cola is currently under evaluation in return on equity category among its peers.

Coca Cola Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Coca Cola, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Coca Cola will eventually generate negative long term returns. The profitability progress is the general direction of Coca Cola's change in net profit over the period of time. It can combine multiple indicators of Coca Cola, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Coca-Cola HBC AG produces, distributes, and sells non-alcoholic ready-to-drink beverages. The company was founded in 1969 and is headquartered in Steinhausen, Switzerland. COCA COLA is traded on Frankfurt Stock Exchange in Germany.

Coca Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Coca Cola. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Coca Cola position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Coca Cola's important profitability drivers and their relationship over time.

Use Coca Cola in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Coca Cola position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Coca Cola will appreciate offsetting losses from the drop in the long position's value.

Coca Cola Pair Trading

Coca Cola HBC Pair Trading Analysis

The ability to find closely correlated positions to Coca Cola could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Coca Cola when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Coca Cola - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Coca Cola HBC to buy it.
The correlation of Coca Cola is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Coca Cola moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Coca Cola HBC moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Coca Cola can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Coca Cola position

In addition to having Coca Cola in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did You Try This Idea?

Run Construction Thematic Idea Now

Construction
Construction Theme
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Construction theme has 61 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Construction Theme or any other thematic opportunities.
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Other Information on Investing in Coca Stock

To fully project Coca Cola's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Coca Cola HBC at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Coca Cola's income statement, its balance sheet, and the statement of cash flows.
Potential Coca Cola investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Coca Cola investors may work on each financial statement separately, they are all related. The changes in Coca Cola's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Coca Cola's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.